Black Dragon Gold Corp.: Positive Preliminary Economic Assessment for Salave Underground
Figure 1: Lateral view of the underground layout (Graphic: Business Wire)
VANCOUVER, British Columbia--(BUSINESS WIRE)--Black Dragon Gold Corp. (ASX/TSX-V: BDG) ("Black Dragon" or the "Company") is pleased to announce the positive results of the Preliminary Economic Assessment ("PEA") completed on its 100% owned Salave Gold Project ("Salave" or "Project") located in Asturias in northern Spain. The PEA is based on the recently completed Mineral Resource Estimate completed by CSA Global (See October 25, 2018 News Release). All figures are in United States Dollars unless otherwise stated.
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“Salave Gold Project Mineral Resource Update for Black Dragon Gold Corp.”
The PEA demonstrates robust economics for an underground mining operation with a 14-year mine life.
Paul Cronin, Managing Director and CEO commented,
"The completion of the PEA is a major milestone on the path to development of the Salave Project and the metrics support our belief that Salave can potentially generate strong returns for shareholders. It forms the first step in our permitting process, presenting a new optimised process on a zero- discharge basis that minimises the visual and surface impact of the project.
The robust results of this PEA underline the potential economic viability of the current Salave resource to be mined over an initial 14 year mine life, and our successful drilling campaign last year indicates strong potential for growth in mine life at Salave.
This study supports that Salave can produce over 1.1Moz (560 kt of concentrate averaging over 59 g/t Au), providing a number of marketing options for export and refining, minimising the need for additional plant and equipment, and hence reducing the Project’s footprint. The relatively low upfront capex also opens alternative financing opportunities which will ensure that both shareholders and the local community benefit from the success of this Project."
KEY PEA OUTCOMES
PEA KEY ASSUMPTIONS AND INPUTS
Table 1 - PEA Summary Parameters
MINERAL RESOURCE ESTIMATE
An updated NI 43-101 Mineral Resource Estimate, effective 22 October 2018 is included in this PEA and has been filed on SEDAR and the ASX market announcements platform (See October 25, 2018 News Release).
Notes:1. Rounding may cause apparent discrepancies2. Resource Estimate conducted by CSA Global of Perth Australia ("CSA") with an effective date of October 22, 2018. Classification of the MRE was completed based on the guidelines presented by Canadian Institute for Mining (CIM, May 2014), adopted for Technical Reports which adhere to the regulations defined in Canadian NI 43-101. The Mineral Resource Estimate was also prepared in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 edition ("2012 JORC Code").3. The Mineral Resource Estimate was first announced on 25 October 2018. Black Dragon confirms that it is not aware of any new information or data that materially affects the information in the previous announcement and that all material assumptions and technical parameters underpinning the Mineral Resource Estimate continue to apply and have not materially changed.4. A cut-off grade of 2 g/t Au has been applied when reporting the Mineral Resource Estimate.5. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability but do have reasonable prospects for eventual economic extraction.6. The quantity and grade of reported Inferred Resources in this estimation are conceptual in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Resource. It is uncertain if further exploration will result in upgrading them to an Indicated or Measured Resource category, although it is reasonably expected that the majority of the Inferred Resources could be upgraded to Indicated Mineral Resources with further exploration.7. The Mineral Resource Estimate underpinning the production targets in this announcement was prepared by a Competent Person under the 2012 JORC Code.8. The title of the report is "Salave Gold Project Mineral Resource Update for Black Dragon Gold Corp.", with an effective date of October 22, 2018, and it was authored by Ian Stockton, B.Sc (Geol)., MAusIMM, FAIG, Dmitry Pertel, MSc (Geol), MAIF, GAA, and Galen White, B.Sc, FAusIMM, FGS.
POTENTIALLY EXTRACTABLE PORTION OF MINERALISATION FOR MINE PLANNING
The mine plan supported by the PEA demonstrates that approximately 81.1% of the total 2018 updated Mineral Resource tonnage is amenable to underground extraction. For purposes of mine planning, the potentially extractable portion of the Mineral Resources are comprised of 9.19 million tonnes at a diluted grade of 3.87 g/t Au, containing just over 1.1 million ounces of gold. The mineralised material modelled to be mined in the PEA contains Mineral Resources classified in the Inferred category (28%) that are too speculative geologically to have economic considerations applied that would enable them to be categorized as Mineral Reserves. These Inferred Resources will require further exploration and definition to meet the criteria to be classified as Indicated or Measured Mineral Resources before being considered for conversion to Mineral Reserves at the next level of detailed economic study.
Given environmental and community considerations, the PEA has only evaluated underground mining operations. The primary mining method selected for detailed analysis in this study was the vertical retreat mining ("VRM"). Sub-level stoping was considered as a secondary method applicable to specific vertical thin geometries (<15m length). Rock and paste fill will be used as backfill to maximize mining recovery.
The mine design was based on basic economic assumptions to create mineable stope outlines. A value of 2 g/t was assumed as mine cut-off grade. Mining dilution and mineralised material loss factors were also applied to each mining shape to reflect the selected mining method.
The mine production rate targets a 0.70 Mtpa of RoM. A conceptual mine layout was designed including stopes and development as illustrated in Figure 1, with 60m levels and 3 x 20m sub-levels. The total mineralised material from stopes, drives and sill pillar recovery (50%) will total 9.2Mt at 3.87 g/t Au.
A long term mine schedule was created integrating stopes and development as shown in Figures 2 and 3. Mineralised zones were sequenced to prioritise higher grades at lower operating costs.
In order to minimise potential social and environmental issues, processing of Salave mineralised material has been limited to crushing, grinding and flotation, with concentrates exported via local ports. Mine feed will be crushed on surface at a rate of 0.7 Mtpa, and then be processed via conventional SAG and ball milling followed by sulphide flotation and thickening.
The run-of-mine will feed a primary jaw crusher with a capacity of 400 t/h with a physical availability of 70% with design factor of 20%.
From an intermediate stockpile, the coarse material will feed the mill circuit which consists of a conventional SAG and ball mill configuration working in close circuit with the cyclones.
The flotation circuit consists of a number of cells of 300-400 m3 capacity (9-10 cells of 40 m3 each) with two conditioning tanks for pH stabilisation and reagents.
The final stage consists of tailings thickening to minimise the fresh water consumption and to re-cycle process water. A ‘paste’ thickener will achieve a product of 70-75% of solids.
Based on flotation test work conducted to date, it is assumed that 97% of the gold head grade will be recovered in the flotation concentrate that will be thickened, filtered and bagged for shipping to customers.
INFRASTRUCTURE AND TAILINGS
Power to the project is available from Tapia, which is linked to the Asturias main distribution grid, and an existing network of power lines enter the property that are connected to the Spanish national transmission grid. Water for both domestic and plant usage can be sourced from wells, the Porcia River (2.5km east of the property) or the reticulated water supply that is currently in place near the plant location.
A Tailings Management Facility ("TMF") will be constructed at surface for temporary storage of plant tailings. The paste and backfill of the mine will minimise the amount of tailings storage at surface, and various options for complete tailings disposal are being evaluated. The TMF design will involve water recovery in the processing plant and transportation to geo-membrane lined facility eliminating any risk for potential surface and ground water contamination.
Surface facilities to support the Salave Project will include an administration and engineering building, security, warehouse, fuel and explosive storage, fire protection, maintenance shops with a site design to accommodate for 50 full time staff.
CAPITAL COSTS AND SENSITIVITIES
The Board of BDG believes there is a reasonable basis to assume the necessary funding for the Salave Gold Project will be obtained for the following reasons:
PEA KEY RECOMMENDATIONS
CRS Ingenieria ("CRS"), in Madrid were the principal authors of the PEA and have made the following recommendations for further evaluation that may improve the economics of the project:
QUALIFIED PERSONS AND COMPETENT PERSONS STATEMENT
The information in this announcement that relates to the PEA for the Salave Gold Project is based on and fairly represents information and supporting documentation prepared by CRS Ingenieria and CSA Global. Paulo Laymen (P.Eng., M.AusIMM., B.Eng., M.Eng.) of CRS Ingenieria supervised the preparation of the PEA, is independent of the Company and a qualified person as defined by National Instrument 43-101 and has reviewed and approved the technical disclosure reported herein. Dmitry Pertel (P.Geo., MSc (Geol), MAIF, GAA) and Belinda van Lente (P.Geo.) of CSA Global were responsible for the Mineral Resource Estimate and are independent of the Company and qualified persons as defined by National Instrument 43-101 and have reviewed and approved the technical disclosure reported herein.
The NI 43-101 Technical Report will be fined on SEDAR within 45 days of this release.
BLACK DRAGON GOLD CORP.1000 Cathedral Place925 West Georgia StreetVancouver, BC V6C 3L2, Canada,T- +44 20 79934077 F- +44 20 email@example.com
ABOUT BLACK DRAGON GOLD
Black Dragon Gold "BDG" is the 100% owner of one of the largest undeveloped gold projects in Europe, the Salave project. Salave is situated in the North of Spain in the province of Asturias. The Salave project has an updated combined Measured and Indicated Mineral Resource of 8.21 million tonnes grading 4.58 g/t Au, containing 1.21 million ounces of gold, plus Inferred resources totalling 3.12 million tonnes grading 3.47 g/t Au, containing 348,000 ounces of gold.
A full technical report summarizing the Mineral Resource estimate completed by CSA Global is available on the company’s web site and posted on SEDAR. In addition to the current Mineral Resource, historical exploration work suggests there is the potential for additional mineralisation within Black Dragon’s landholdings.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements that are based on the Corporation's current expectations and estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current planned exploration activities; changes in project parameters as plans to continue to be refined; possible variations in recovered material grade or recovery rates; accidents, labor disputes and other risks of the mining industry; delays or any inability in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Corporation disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
Neither the TSX Venture Exchange, nor its Regulation Services Providers (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
All figures are rounded to reflect the relative accuracy of the news release.
Paul CroninCEO & Managing DirectorP: +44 20 79934077E: firstname.lastname@example.org
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